Newspaper article THE JOURNAL RECORD

Popeyes Searching for Loans

Newspaper article THE JOURNAL RECORD

Popeyes Searching for Loans

Article excerpt

NEW ORLEANS (AP) - The owner of Popeyes Famous Fried Chicken and Biscuits reportedly is searching for $110 million in private loans to pay off debt from the recent acquisition of Church's Fried Chicken.

Church's has 12 restaurant locations in Oklahoma City.

A. Copeland Enterprises, which owns Popeyes, had hoped to sell $110 million in junk bonds in September but scuttled those plans when the market for the high risk investments began to sour, the Times-Picayune newspaper reported.

Company owner Al Copeland was out of town. When asked if Copeland was in any financial difficulty because of the inability to issue junk bonds or if the purchase of Church's was in danger, Copeland spokeswoman Kit Wohl said, ``absolutely not.''

The newspaper reported that Copeland is negotiating with investment banker Merrill Lynch for a private placement of $110 million in five-year notes. The unsecured notes would be similar to junk bonds, the newspaper said.

The notes would payoff a $140 million bridge loan from Merrill Lynch that helped finance the $383 million purchase of Church's last March. The loan has become increasingly burdensome for Copeland because the rate is rising, Bucky Kilbourne, executive vice president and chief financial officer for Copeland Enterprises told the newspaper.

A bridge loan is a temporary loan used until other financing can be arranged. In Copeland's case, the bridge loan was to be paid off by the proceeds from the bond sale. Junk bonds offer investors very high yields to finance deals with a lot of risk, frequently three or four percentage points over the prime lending rate, which currently is about 10 percent.

Last March, Copeland's was paying 10. …

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